5 tips for family financial talks

Key Points

The holiday season provides an opportunity for family financial conversations

Relatives who communicate regularly are more confident about overall family wealth

Getting ahead of difficult conversations can prevent financial fallout down the road

For many families, the holiday season is the only time of the year when several generations are able to spend time together. While the focus of the season should be on relaxation, togetherness and fun, it’s also a prime opportunity for families to talk about sibling responsibilities concerning aging parents, to share insights and advice around boomerang kids, and, in some cases, to have preliminary discussions about estate planning.

People who talk about finances with their relatives are more likely to be confident about their family’s future, according to the Ameriprise Financial Family Wealth Checkup study.* They’re also more apt to take steps toward estate planning, such as creating a will and designating beneficiaries.

Why bring up money with family?

When siblings have conflicts about money, the study found that seven out of 10 times, the arguments revolve around the finances of their parents. Often, these disagreements can be avoided by having honest conversations and really listening to each other.

“Talking about money is one of the most important things you can do for the health of the family unit, but most relatives spend way too little time discussing financial topics,” says Christine Romans, CNN Chief Business Correspondent. “End-of-year holidays are perfect because many issues are brought to light with the increased consumerism and heightened emotions of the season.”

Here are five tips for talking about money with your family this holiday season.

While some of the best conversations happen spontaneously, important or difficult topics can get brushed under the rug without a plan to meet and discuss them. Let key family members know you would like to set up time to talk, and find a mutually convenient time. Make sure everyone who is affected by the discussion has a seat at the table.

Romans cautions against starting the conversation by asking a question that puts others on the spot, such as whether everyone has a long-term care plan. “A better opening would be to share that Americans spend more time planning for vacations than retirement and then segue into your own plans,” Romans says.

Concerned about your parents’ ability to support themselves down the road? Is the family frustrated about a boomerang child not paying rent? While the study* found that 67% of adult children have talked with their parents about health care costs or inheritance issues, only a few discussed their bigger financial picture on a regular basis.

Be sure to approach the conversation with love and respect so that family members don’t feel cornered. “One way to gain insight into your siblings’ and parents’ preparations is to first share difficult decisions you’ve made, such as establishing guardianship of kids,” Romans says.

When it comes to families and communication, sometimes it seems easier to say nothing or, conversely, to rush to quick judgment. Instead, focus on actively listening to what the other person has to say and really trying to understand their perspective.

For particularly tough conversations, Romans says that many families find it beneficial to have one meeting where they listen to the person at the center of the issue without providing their opinion and then reconvene to talk about solutions. When her mom was considering taking Social Security at the earliest age eligible, Romans’ parents sat down with her and her siblings to share their thought process and get advice. “While it was ultimately my parents’ decision, I really appreciated my dad keeping us in the loop,” Romans says.

“Open communication is one of the most valuable wealth-preservation tools.”

Christine Romans, CNN Chief Business Correspondent

A record 60.6 million Americans live in multi-generational households, according to the Pew Research Center’s 2014 analysis of U.S. Decennial Census data. Family gatherings provide an opportunity for siblings to share thoughts about setting financial and emotional boundaries with boomerang kids — as well as how to benefit from the experience.

Co-habitation can provide valuable insights into a parent’s health or a child’s finances. “Until the middle of the 20th century, multi-generational housing was actually the norm,” Romans says. “In addition to boomerang kids, I’m seeing middle-aged children taking in older parents, which means that grandparents can help with things like childcare.”

During each conversation, designate a point person to create a to-do list based on the strengths of each family member. For example, the financial whiz sibling may check in with Dad once a month to help with bills, while another who lives closer may take Mom to medical appointments.

If one of the to-dos involves helping a family member financially, know you’re not alone — four out of 10 people provide financial support to a parent or spouse’s parent, according to the study.* The key here is to make sure resentments don’t build.

“Open communication is one of the most valuable wealth-preservation tools,” Romans says. “When you know where everyone stands, small problems are less likely to become bigger financial issues.”

Talk to your advisor

Not sure how to get the conversation started? Your advisor can help facilitate talks between family members by providing a neutral perspective. You may also want to consider giving your children or other family members the gift of a financial plan to help set them up for financial success and preserve the financial legacy you’ve worked so hard for. Your advisor can work with you to determine whether this is a good fit for your situation and financial goals.

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Kristina Sturgis is licensed and registered to conduct business in VA.

Based on licenses and registrations I hold, I may also conduct business in CA, DC, MA, ME, NC, MD, FL, NH.

Unless otherwise noted, all content, including any article appearing within News & Insights, was authored by the corporate communications department of Ameriprise Financial, and is the property of Ameriprise Financial. Individual advisors have been granted permission to post content on this site, but are not the authors of said content except where specifically stated.

*The Ameriprise Family Wealth Checkup study was commissioned by Ameriprise Financial, Inc. and conducted online between Nov. 23 and Dec. 15, 2016, by Artemis Strategy Group among 1,700 U.S. adults between ages 25 and 70, who had at least one living immediate family member. They also had at least $100,000 in investable assets ($25,000 in investable assets for younger respondents).